Token tax: Collection system ‘will be fixed’

Proposal to let commercial banks collect tax shelved.

Karamat Bhatty August 27, 2011


The Excise and Taxation Department has given up on a proposal to overhaul its token tax collection system, leaving collection of taxes on private vehicles to the General Post Office and that on commercial vehicles to the National Bank of Pakistan.

A proposal was tabled last year to make arrangements with commercial banks and let them as well as the NBP collect the tax on E&T’s behalf.

(Read: Motor vehicle tax - for the govt there is nothing certain in life, except death and evading taxes)

E&T director (admin) Imran Aslam said imporving the existing system was more likely to enhance efficiency than bringing in a new system. “A new collection system will add to the confusion of taxpayers,” he said.

Also, he said, with several banks allowed to collect taxes, a lot of time would be wasted on paperwork. He said the E&T Department had requested the State Bank of Pakistan to speed up the paper work involved in the collection process.

The General Post Office and the NBP have collected token tax on behalf of the E&T Department since 1972.
Tax officials say taxpayers regularly complain about difficulties with depositing their taxes. “It becomes very problematic in cases where people with vehicles registered in one city move to another city,” they said. In such cases, they added, people have to mail their deposits to the post offices where their vehicles are registered. They said a person could get the registration documents relocated to post office near the new location but for that they needed a no-objection certificate from the E&T Department office at the FaridKot House.

The changes in the collection system were proposed by former E&T secretary Khwaja Shumail and the then deputy secretary (technical). The E&T Department has been in talks with commercial banks on how to go about it. However, the talks have now been abandoned

Published in The Express Tribune, August 27th, 2011.

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